JIANGHUAI Automobile: Non-recurring profit and loss pinch point "rescue driving"

After deducting non-recurring gains and losses, Jianghuai Automobile's loss amount hit a record high; under the shrinking sales of commercial vehicles, can the company's passenger car business be worthy of the responsibility?

Reporter Wang Dongyue/Wen

In 2021, Jianghuai Automobile (600418. SH) achieved operating income of 40.214 billion yuan, down 6.11% year-on-year; net profit attributable to the mother of 200 million yuan, an increase of 40.24% year-on-year.

In 2021, Jianghuai Automobile has confirmed a total of 2.084 billion yuan of non-recurring profit and loss. Among them, the total amount of non-recurring profit and loss recognized in December was 1.188 billion yuan, close to 60% of the total for the whole year, and the problem of centralized recognition was highlighted. In 2021, the net profit attributable to the mother of Jianghuai Automobile after deducting non-deductions fell to -1.884 billion yuan, the largest loss in history.

In 2021, JAC Motor sold 252,500 passenger cars, an increase of 62.28% year-on-year. Among them, the sales volume of pure electric new energy vehicles was 134,100 units, an increase of 169.12% year-on-year, becoming a highlight of the company's annual report. However, in 2021, the overall gross profit margin of the company's passenger car business was -1.85%, and the loss situation could not be fundamentally reversed.

Losses reached new highs

In 2021, Jianghuai Automobile staged a "high drive low walk". In the first half of the year, the company sold a total of 285,000 vehicles of various types, an increase of 36.12% year-on-year; achieved sales revenue of 22.382 billion yuan, an increase of 13.87% year-on-year; and net profit attributable to the mother was 478 million yuan, an increase of 424.03% year-on-year.

Entering the second half of the year, the sales data of Jianghuai Automobile has shrunk. Among them, in the third quarter, the company sold a total of 111,500 vehicles of various types, a decrease of 11,700 units from the same period last year, a decline of 9.5%. In the third quarter, the company achieved sales revenue of 8.344 billion yuan, down 25.19% year-on-year, and net profit attributable to the mother was -283 million yuan, down 249.06% year-on-year.

According to the annual report, in the whole year of 2021, Jianghuai Automobile produced a total of 526,800 vehicles and chassis of various types, an increase of 15.50% year-on-year; sales totaled 524,200 units, an increase of 15.63% year-on-year. The company achieved a total operating income of 40.311 billion yuan, down 6.05% year-on-year. Among them, the vehicle business achieved sales revenue of 35.955 billion yuan, down 8.57% year-on-year.

Relative to the decline in revenue, in 2021, Jianghuai Automobile achieved a net profit attributable to the mother of 200 million yuan, an increase of 40.24% year-on-year. However, after deducting non-recurring gains and losses, the degree of loss of JacHuai Automobile was further aggravated.

In 2021, Jianghuai Automobile has recognized a total of 2.084 billion yuan of non-recurring profit and loss, an increase of 222 million yuan over the previous year, an increase of 11.92%. The company's net profit attributable to the mother after deducting non-deductions in 2021 was -1.884 billion yuan, surpassing 2018 and hitting a record loss.

Since 2017, JAC Automobile has recognized a cumulative non-recurring profit and loss of 6.646 billion yuan, and after deducting the above-mentioned non-recurring profit and loss, the company has accumulated a loss of 6.551 billion yuan.

From the perspective of confirmation nodes, the recognition of jacques automobile's non-recurring profit and loss is still concentrated in December. In 2020, Jianghuai Automobile recognized a total of 1.232 billion yuan of other income, and recognized a gain of 1.227 billion yuan on the disposal of assets through the sale of its assets. Among them, on December 7 and 24, 2020, the company issued two asset disposal announcements, and the total asset disposal price exceeded 1.6 billion yuan.

In 2021, the amount of income from the disposal of assets of Jianghuai Automobile decreased from 1.227 billion yuan to 433 million yuan, but the amount of other income recognized rose from 1.232 billion yuan to 1.953 billion yuan, an increase of 718 million yuan over the previous year, an increase of 36.76% year-on-year.

Divided by sub-items, in 2021, jianghuai automobile's other income is mainly project research and development subsidies, involving an amount of 1.19 billion yuan, accounting for 60.93%. It should be pointed out that in 2020, jianghuai automobile's other revenue does not involve project research and development subsidies.

In 2021, Jianghuai Automobile issued a total of 12 announcements involving subsidies, involving a total amount of 1.584 billion yuan. Among them, on December 1, December 15 and December 31, 2021, Jianghuai Automobile issued three subsidy announcements, involving 602 million yuan, 172 million yuan and 203 million yuan respectively, of which the amount related to R&D subsidies was 850 million yuan.

According to statistics, in December 2021, Jianghuai Automobile issued five announcements on receiving subsidies, totaling 1.036 billion yuan in various subsidies, accounting for 65.4% of the company's annual subsidy amount. Through the above non-recurring profit and loss, the company turned around in the fourth quarter.

It is worth mentioning that despite receiving large R&D subsidies, in 2021, Jianghuai Automobile's R&D investment has actually shrunk, with R&D investment of 1.794 billion yuan in that year, a decrease of 15.44 million yuan or 0.85% over the previous year. Among them, the company's expense-based R&D investment was 1.374 billion yuan, a decrease of 303 million yuan over the previous year, and the capitalization amount was 420 million yuan, an increase of 287 million yuan over the previous year, an increase of 215.79%. The capitalization rate of the company's R&D investment reached 23.41%, an increase of 16.06 percentage points over the previous year. At the same time, in the asset impairment link, in 2021, Jianghuai Automobile recorded an impairment loss of 117 million yuan for development expenses, which was the first time since the company's listing.

"Downgraded" revenue forecast

Compared with previous years, a significant change in Jianghuai Automobile is that the company's long-term pre-disclosure system of production and marketing plans was "interrupted" in 2022. As of now, Jianghuai Automobile has not disclosed its sales outlook for 2022 in the form of a separate announcement. Previously, Jianghuai Automobile was accustomed to pre-disclosing the company's overall production and sales plan for the next fiscal year in November or December of each year.

In the annual report, Jianghuai Automobile revealed that the company plans to produce and sell 568,000 vehicles and chassis in 2022, an increase of 8.36% year-on-year; it is expected to achieve a total operating income of 45 billion yuan, an increase of 11.63% year-on-year.

The above revenue expectation is the first time in the past five years that Jianghuai Automobile has reduced its estimated revenue to less than 50 billion yuan. Previously, from 2017 to 2020, Jianghuai Automobile's revenue forecast for the next fiscal year exceeded 50 billion yuan. Among them, the company's revenue forecast for 2020 is 50.8 billion yuan, and the completion degree is about 79.16%.

The adjustment of letter phi habits and revenue targets reflects the operating pressure faced by Jianghuai Automobile to a certain extent. Since the company obtained the approval for passenger car production in 2007, Jianghuai Automobile has adhered to the "concurrent action" strategy of commercial and passenger vehicles for many years and has not been able to "blossom". In the past years, the commercial vehicle business has always played the "mainstay" of Jianghuai Automobile's operation.

In 2020, driven by factors such as the elimination of National III. automobiles, the tightening of super-regulation and infrastructure investment, the production and sales of domestic commercial vehicles increased by 20% and 18.7% year-on-year, respectively, and the annual production and sales of commercial vehicles reached 5.231 million and 5.133 million units, respectively, with both heads exceeding 5 million units, hitting a record high. Jianghuai Automobile's cumulative sales of commercial vehicles were 297,800 units, an increase of 15.03% year-on-year, and the sales revenue was 26.972 billion yuan, an increase of 22.26% year-on-year.

However, from July 2021, sales in the domestic commercial vehicle market have cooled down rapidly. In 2021, Jianghuai Automobile sold a total of 271,800 commercial vehicles, down 8.73% year-on-year, and the company's commercial vehicle sales revenue fell to 23.552 billion yuan, down 12.68% year-on-year.

Corresponding to the commercial vehicle business, since 2016, Jianghuai Automobile has been "frustrated" in the passenger car field. The company's passenger car sales went all the way down from a peak of 350,000 units. In 2020, Jianghuai Automobile sold a total of 155,600 new energy vehicles, a decrease of nearly 60% compared with the peak.

"Bet" on new energy

In 2021, Jianghuai Automobile sold a total of 252,500 passenger cars, an increase of 97,100 units over the previous year, an increase of 62.48% year-on-year. Among them, there were 134,100 pure electric passenger cars, an increase of 84,300 units over the previous year, an increase of 169.12% year-on-year; the company's passenger car business achieved sales revenue of 8.723 billion yuan, an increase of 19.39% year-on-year. New energy vehicles have become the key products of the "turnover" of Jianghuai Automobile's passenger car business.

In 2016, JIANGHUAI Automobile invested 2.3 billion yuan to build the JAC Weilai factory in Hefei, and the company opened a foundry sales model. According to the annual report, in 2021, Jianghuai Automobile and NIO cooperated to deliver about 93,000 new energy vehicles, an increase of 111.36% year-on-year. In terms of sales share, in 2021, nearly 70% of Jianghuai Automobile's pure electric passenger cars will come from Weilai.

In 2021, domestic new energy vehicle sales hit a record high, with a cumulative sales of 3.521 million units in the whole year, an increase of 157.5% year-on-year, and the penetration rate rose to 13.4%. During the reporting period, the new car-making forces, including "Wei Xiao Li Na", achieved sales growth of more than 1 times.

In 2021, NIO delivered 91,400 units, an increase of 109.1% year-on-year. Among them, the company's sales in December were 10,500 units, an increase of 49.7% year-on-year.

A phenomenon worth noting is that since November 2022, NIO's car deliveries have declined for four consecutive months. Compared with the industry growth rate, in 2021, the sales growth rate of Weilai Automobile did not reach the average level of the industry, and failed to maintain the company's "champion" throne in the sales ranking of new car-making forces.

In 2021, Xiaopeng Automobile delivered a total of 98,200 new energy vehicles, and the company's sales increased by 263% year-on-year, surpassing Weilai Automobile to become the new "sales champion" among the "new forces" of car manufacturing. Among them, the company sold a total of 16,000 new energy vehicles in December, an increase of 181.0% year-on-year. Ideal Automobile delivered a total of 90,500 new energy vehicles in 2021, an increase of 177.4% year-on-year, ranking third among the "new forces" of car manufacturing with a sales gap of 938 vehicles, and the company sold a total of 14,100 new energy vehicles in December, an increase of 130% year-on-year.

In addition, BYD and GAC Aeon sold a total of 593,700 new energy vehicles and 123,600 new energy vehicles in 2021, respectively, ranking first and second in the total sales of new energy vehicles. Nezha Automobile ranked first in the growth list with a sales growth rate of 362%.

Affected by the growth rate of sales, in 2021, NIO's sales share of new energy vehicles fell to 2.59%, and the market share of Ideal and Xiaopeng rose to 2.79% and 2.57% respectively.

The latest sales data shows that in 2022, Weilai's sales ranking continues to decline. In January and February 2022, NIO delivered 9,652 and 6,131 vehicles respectively, and the company delivered 15,800 new energy vehicles, ranking fourth. In the same period, Ideal Automobile delivered 20,700 vehicles, ranking first; Xiaopeng Automobile delivered a total of 19,000 new energy vehicles, ranking second; Nezha Automobile delivered 18,100 vehicles with a year-on-year growth rate of 332%, ranking third.

Will the decline in sales of WEILAI Have an impact on JAC Motors?

In response to the issues involved in the article, the reporter of the Securities Market Weekly tried to send an interview letter to Jianghuai Automobile and called, but as of press time, the interview letter could not be sent successfully, and the phone could not be connected.